03 January 2017

Chris Tillman: What Would a Contract Extension Look Like?

Many Orioles starting pitchers have come and gone during the Orioles' run of success since 2012. Remember Scott Feldman? Freddy Garcia? Heck, remember Zach Britton and Jake Arrieta? Starters, all.

None have Chris Tillman's tenure. Essentially a throw-in in the Erik Bedard/Adam Jones trade, Tillman's become a rotation mainstay. He hasn't always been great; hell, he hasn't always been good. But he is a serviceable enough starting pitcher and has always been worth putting on the mound.

So it's weird to think 2017 could be Tillman's last year in an Orioles uniform. He's a free agent after the season ends, and while he certainly deserves to shop himself around, I think he and the Orioles can find common ground on a contract extension.

The Orioles have an incentive to offer one. Tillman can leave after 2017, but much of their core -- Manny Machado, Adam Jones, and Zach Britton to name a few -- will be around for one last hurrah in 2018. Should the Orioles attempt to compete that year as well, Tillman will help. And after 2018, the team needs pitchers. They have only Kevin Gausman and Logan Verrett, plus question marks in Dylan Bundy, Tyler Wilson, and Mike Wright.

Tillman has an incentive to listen. He's not an ace, so a down 2017 would hurt his value. He's a little old to be hitting the free-agent market as a starting pitcher. Players want to contend and the current Orioles core can do that. I don't know whether he likes playing for Baltimore, but I can't imagine he's so unhappy he would reject an extension out-of-hand. Plus, shoulder injuries can take whole careers with them; Tillman spent time on the DL with bursitis in August.

An agreement might be tough. Tillman's not some ramen-eating rookie who'll take a wildly below-market extension just to set him up for life. He already is: MLB Trade Rumors projects he'll make $10.6M in 2017, which will push his career earnings over $23M.

Performance-wise, Orioles fans know the deal. Tillman is entering his third and final year of arbitration at age 29, which is post-peak for most pitchers. He profiles as starting pitching depth at 1-2 fWAR per year but can reach above-average if his BABIP or LOB% are under control. He hasn't shown he can consistently control either, though. He has remained durable except for the bursitis.

Even though I'm proposing an extension, I doubt one will happen. Tillman will be 29 this year. Since 2010 only one right-handed starting pitcher aged 28-30 has signed away his first few free agent years: Ricky Nolasco with the Marlins in 2010.

This lack of comps means either teams don't want to risk extending starting pitchers who weren't good enough at ages 25-27, or such pitchers have high opinions of themselves and seek free agency at all costs. Likely it's some combination of both: teams may offer conservative extensions hoping they can land the pitcher but he's been waiting for free agency so long, and he's already post-peak, that he wants to get all the money he can.

But for giggles, let's work out what an extension might look like.

Extension Length

A three-year extension feels right to me. This would replace Tillman's last year of arbitration and buy out his first two free agent years -- the first of which the Orioles hope to contend, the second of which the team might punt, meaning Tillman could be trade bait.

Three years matches not only the Orioles' situation, but also the extension Nolasco took in 2010. Younger pitchers, better pitchers, and left-handed pitchers have gotten four or even five years in an extension. Tillman doesn't fall into any of those categories.

Extension Amount

With a length of three years, let's start the negotiations at $34M. I used Tom Tango's WARcels formula to estimate Tillman will be worth 4 wins during the next three years:

2017: 1.6 fWAR

2018: 1.2 fWAR

2019: 0.8 fWAR

That's 3.6 fWAR, but I rounded up to be generous. The formula is an estimate only, but an informed one, and it allows for a starting point. For what it's worth, Steamer projects 1.4 fWAR next year.

At $8.5M per win today, 4 wins is worth $34M. That feels like a good starting point. It's in line with market prices and raises Tillman's AAV to $11.3M. He saves face by not taking a pay cut and the Orioles keep their contention window open a bit longer. Tillman stays on the team through age 31.

Nolasco got $26.5M, but in today's money that's really $30M. Add in WAR inflation at 5% per year and his deal is worth about 3/$39M today. Since Nolasco was a better pitcher (he had two four-win seasons prior to signing) and was a year younger than Tillman is, his extra $5M makes sense.

Tillman's Choice

Let's say the Orioles offer 3/$34M today. If you're Tillman, would you take it?

Consider why you should reject the deal:

You can afford to shop around. You're set to clear $23M in career earnings before hitting free agency.

You're a durable innings-eater with a long track record of average performance and an All-Star appearance.

You triple your guaranteed earnings (assuming a salary of $10.6M in 2017).

You remain on a contender for two years.

If the Orioles want Tillman badly enough for 2018, he'll have leverage to hold out for more money or a fourth year. In this case, the offer might increase to 3/$40M. I doubt Dan Duquette would give a fourth year. That would put Tillman in Justin Verlander / Adam Wainwright territory; each got five years at age 30 and 31 respectively. Tillman would be a year younger then them but nowhere near as talented. Josh Beckett, also much better pitcher, also got a four-year contract at age 30.

Remember: I'm talking about an extension, not a free-agent contract. Assuming 2017 goes well, Tillman could get more on the open market: maybe 3/$45M or even 4/$52M. But he's not on the open market now. From the player's perspective, an extension involves lowering your asking price in exchange for guaranteed employment.

9 comments:

Matt P
said...

Tillman may have been worth 1.4 fWAR last year, but he was also worth 4.1 brWAR. Flipping the numbers is to his advantage and would increase his value significantly. Using those numbers, it would be fair to value him at 11 wins over 4 years or roughly 4 years and $88 million.

If so, to sign an extension we'd probably be talking something at least like 4 yrs and $61M ($10M, $17M, $17M, $17M).

3/34? Gallardo got that with a first rounder attached before the shoulder issue. Ubaldo got 4/50 with a first rounder attached. Chen got 5/80 or something with an opt out. Samarja got 5/90? Ian Kennedy? Mike leake?

I don't think these estimates are good for pitchers. Only thing going for the Orioles here is there are a lot of SP on the market next year which should help control price.

One interesting thing people aren't thinking about in regards to these contracts is how teams are FINALLY wising up. No longer are very good, but old, players such as Encarnacion getting massive contracts. Heck, look at all the serviceable-to-pretty good players left in free agency. Teams are not looking to shell out large contracts for players unless they're, say, Zach Greinke or Aroldis Chapman and represent a huge upgrade over other possibilities. I agree that Tillman's age, mileage, and free agent class next year will plummet his value. Especially if he turns down a potential qualifying offer.

Therefore, I think your estimates for extensions/contracts is reasonable. Honestly, I'm feeling iffy about the O's chances in 2017, slightly less confident about 2018, and unfortunately the organization will likely descend into a Cincinnati Reds (although with more payroll flexibility) type disaster after that. With ABSOLUTELY no young, cheap help on its way, the O's have to go as All-In as possible these next 2 years, it's going to be a disaster in 2019 (and beyond) no matter what they do.

Especially if we decide Machado is a lost cause, look for a fire-sale somewhere in between Summer 2017 and Winter 2018.

To expand on my above contract: Teams don't want to pay a lot of $$$ for 0-2 WAR players. Generally there are cheaper alternatives to fill these spots. It seems as if this offseason could be the beginning of the end for MLB's middle-class. It's likely to shift towards Machado/Harper contracts, and pre-arbitration players.

I don't want to scream collusion- instead it seems as if teams are so scared of getting an overpaid-replaceable player they're willing to take on more risk with more unknown commodities on the cheap.

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